UNITED  STATES

SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON,  D.C.  20549

___________________

## FORM 10-Q

(Mark One)

##### X  QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2001

OR

##### TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

___________________

Commission file number 000-22327

## CONCERO INC.

Incorporated Pursuant to the Laws of the State of Delaware

___________________

Internal Revenue Service-Employer Identification No. 74-2796054
6300 Bridgepoint Parkway, Building 3, Suite 200, Austin Texas   78730
(512) 343-6666

Indicate by check mark whether the  registrant  (1) has filed all reports
required to be filed by  Section 13
or 15(d) of the  Securities  Exchange Act of 1934 during the  preceding 12 months (or for such shorter  period that the
registrant was required to file such  reports),  and (2)has been subject to such filing  requirements  for the past 90 days.

Yesx      No __________

Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock,  as of the latest practicable  date:  10,195,790  shares of the Company's Common Stock,  $.01 par value, were
outstanding as of April 30, 2001.

`CONCERO, INC.

                                                   Table of Contents



                                                                                                               Page
                                            Part I - Financial Information

Item 1.     Financial Statements (Unaudited)......................................................................3

            Condensed Consolidated Balance Sheets - December 31, 2000 and March 31, 2001..........................3

            Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2000
              and March 31, 2001..................................................................................4

            Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2000
              and March 31, 2001..................................................................................5

            Notes to Condensed Consolidated Financial Statements..................................................6

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations.........................................................9

Item 3.     Quantitative and Qualitative Disclosures about Market Risks..........................................19


                                            Part II - Other Information

Item 6.     Exhibits and Reports on Form 8-K.....................................................................20

            Signatures...........................................................................................21

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

                                                     Concero, Inc.
                                         Condensed Consolidated Balance Sheets
                                         (in thousands, except per share data)

                                                                 December 31,          March 31,
                                                                     2000                 2001
                                                               -----------------     ---------------
                                                                                      (Unaudited)
Assets
Current assets:
   Cash                                                              $    1,611           $   4,484
   Short-term investments                                                12,598               7,973
   Accounts receivable, net of allowance for doubtful
      accounts of  $1,520 at December 31, 2000 and $1,509
      at March 31, 2001                                                  11,243               7,230
   Unbilled revenue under customer contracts                                 86                  42
   Income tax receivable                                                    664                 588
   Prepaid expenses and other current assets                              1,005               1,153
                                                               -----------------     ---------------
Total current assets                                                     27,207              21,470
Deferred tax asset                                                        2,281                   -
Property and equipment, net                                               6,318               3,733
                                                               -----------------     ---------------

Total assets                                                         $   35,806          $   25,203
                                                               =================     ===============


Liabilities and stockholders' equity
Current liabilities:
   Trade payables                                                     $     573          $       98
   Accrued expenses and other current liabilities                         2,473               3,843
                                                               -----------------     ---------------
Total current liabilities                                                 3,046               3,941

Stockholders' equity:
  Preferred stock, par value $.01 per share, 1,000 shares
     authorized and none issued and outstanding                               -                   -
  Common stock, par value $.01 per share, 34,000 shares
     authorized, 10,163 and 10,165 shares issued and
     outstanding at December 31, 2000 and March 31, 2001,
     respectively                                                           102                 102
  Additional paid-in capital                                             33,695              31,417
  Accumulated other comprehensive income (loss)                              16                 (50)
  Retained deficit                                                       (1,053)            (10,207)
                                                               -----------------     ---------------
Total stockholders' equity                                               32,760              21,262
                                                               -----------------     ---------------

Total liabilities and stockholders' equity                           $   35,806          $   25,203
                                                               =================     ===============

                                                See accompanying notes.
Concero, Inc.
                                    Condensed Consolidated Statements of Operations
                                         (in thousands, except per share data)
                                                      (Unaudited)

                                                          Three Months Ended
                                                               March 31,
                                                      ----------------------------
                                                             2000         2001
                                                      ------------     -----------

Revenue                                                  $ 14,225         $ 8,485
Operating expenses:
   Technical staff                                          7,396           6,937
   Selling and administrative staff                         2,605           2,687
   Other expenses                                           3,529           8,257
                                                      ------------     -----------

Total operating expenses                                   13,530          17,881
                                                      ------------     -----------

Income (loss) from operations                                 695          (9,396)

Interest income                                               234             242
                                                      ------------     -----------

Income (loss) before income taxes                             929          (9,154)

Provision for income taxes                                    345               -
                                                      ------------     -----------

Net income (loss)                                         $   584         $(9,154)
                                                      ============     ===========

Basic earnings (loss) per share                           $  0.06         $ (0.90)
                                                      ============     ===========

Diluted earnings (loss) per share                         $  0.05         $ (0.90)
                                                      ============     ===========

Shares used in basic earnings (loss) per share
   calculation                                              9,802          10,164
                                                      ============     ===========

Shares used in diluted earnings (loss) per share
   calculation                                             11,462          10,164
                                                      ============     ===========

                                                See accompanying notes.
Condensed Consolidated Statements of Cash Flows
                                                    (in thousands)
                                                      (Unaudited)


                                                                               Three Months
                                                                              Ended March 31,
                                                                     ----------------------------------
                                                                               2000               2001
                                                                     ---------------     --------------
Operating activities
Net income (loss)                                                          $    584          $  (9,154)
Adjustments to reconcile net income (loss) to net cash provided
   by (used in) operating activities:
     Depreciation and amortization                                              441                620
     Excess property and equipment reserve                                        -              2,150
     Changes in operating assets and liabilities:
        Accounts receivable                                                    (835)             4,013
        Unbilled revenue under customer contracts                              (756)                44
        Prepaid expenses and other current assets                              (428)              (148)
        Trade payables                                                           60               (282)
        Deferred revenue                                                          -                  -
        Accrued expenses and other current liabilities                          761              1,470
        Income taxes                                                            324                 76
                                                                     ---------------     --------------
Net cash provided by (used in) operating activities                             151             (1,211)
                                                                     ---------------     --------------

Investing activities
Sale (Purchase) of short term investments                                      (334)             4,559
Acquisition of property and equipment                                        (1,672)              (478)
                                                                     ---------------     --------------
Net cash provided by (used in) investing activities                          (2,006)             4,081
                                                                     ---------------     --------------

Financing activities
Issuance of common stock                                                        322                  3
                                                                     ---------------     --------------
Net cash provided by financing activities                                       322                  3
                                                                     ---------------     --------------

Net decrease in cash                                                         (1,533)             2,873
Cash, beginning of period                                                     2,108              1,611
                                                                     ---------------     --------------

Cash, end of period                                                        $    575           $  4,484
                                                                     ===============     ==============

Non-cash activities:
Unrealized gain (loss) on investments                                      $     19           $    (66)
Reduction of income taxes payable associated with the
   exercise of stock options                                               $  1,975           $      -
Reversal of deferred tax asset                                                    -           $  2,281


                                                See accompanying notes.`



#### Concero, Inc.
Notes to Condensed  Consolidated Financial  Statements  March 31,  2001
(Unaudited)

##### 1.     Nature of Business

Concero, Inc. ("Concero" or the "Company") is an e-business services firm that offers strategic consulting skills
with deep technology and integration expertise.  This combination enables the Company to utilize existing and new
technologies to provide reliable, flexible and scalable e-business solutions.  Alliances with leading Internet and
interactive television technology providers allow the Company to gain a thorough understanding of the providers'
products and perspective on other products as well as next-generation technologies.  Using its technology insight and
skills, Concero assists its clients to define, design, develop and deploy e-business solutions that enhance its
clients' competitive positions.

Concero's strategy involves providing high value-added e-business services and emphasizing relationships with leading technology
providers aligned with the Company's e-business focus.  Concero's focus service offerings consist of:

- Strategy - to help clients create e-business strategies;
- Customer Portals - to enable clients to present a unified view of their company to their customers over the
Internet and through television and mobile devices,
- Content Chains - to enable clients to efficiently produce and manage compelling content that can be packaged
and marketed for delivery to customers when and where the customer wants it; and
- Interactive Television - to deliver interactive television and entertainment on demand solutions, extending
the reach of e-business to mass audiences.

##### 2.     Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Concero, Inc. and its
wholly owned subsidiaries.  All significant inter-company balances and transactions have been eliminated in
consolidation.  The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission (the "SEC") regarding interim financial
reporting. Accordingly, they do not include all the information and notes required by accounting principles generally
accepted in the United States for complete financial statements and should be read in conjunction with the financial
statements and notes thereto for the year ended December 31, 2000 included in the Company's annual report on Form
10-K.  The accompanying financial statements reflect adjustments, all of which are of a normal recurring nature,
which are, in the opinion of management, necessary for a fair presentation. The results for interim periods are not
necessarily indicative of full year results.

##### 3.     Comprehensive Income (Loss)

The components of comprehensive income (loss) for the three months ended March 31, are as follows (in thousands):

`2000            2001
                                                      -----------     -----------

Net income (loss)                                         $  584        $ (9,154)

Unrealized gain (loss) on short term investments              19             (66)
                                                      -----------     -----------
Comprehensive income (loss)                               $  603        $ (9,220)
                                                      ===========     ===========`

##### Concero,  Inc.  Notes  to  Condensed  Consolidated
Financial Statements (Continued)(Unaudited)

##### 4.     Earnings (Loss) per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except
per share data) for the three months ended March 31:

`2000               2001
                                                   --------------      --------------
Numerator:
  Net income (loss)                                      $   584           $ (9,154)
                                                   ==============      ==============

Denominator:
  Shares used in basic earnings (loss) per
    share calculation                                      9,802             10,164

  Effect of dilutive securities:
    Employee stock options                                 1,506                  -
    Warrants                                                 154                  -
                                                   --------------      --------------
  Shares used in diluted earnings (loss) per
    share calculation                                     11,462             10,164
                                                   ==============      ==============

Basic earnings (loss) per share                         $   0.06           $  (0.90)
                                                   ==============      ==============

Diluted earnings (loss) per share                       $   0.05           $  (0.90)
                                                   ==============      ==============`

##### 5.     Cost Reduction Measures

The Company initiated cost reduction measures which included a workforce reduction and elimination of excess office
space and equipment.  These cost reduction measures resulted in a charge to other expense of  $4.6 million during the
quarter ended March 31, 2001, as described below (in thousands):

`Cash Items          Non-Cash         Charge to         Payments and        March 31, 2001
                                                                     Other
                                                   Items           Expense         Charges Made       Accrual Balance
                        ---------------    --------------    --------------     ----------------    ------------------

Severance                    $   1,512           $     -         $   1,512              $   584               $   928
Excess Equipment                     -             2,150             2,150                2,150                     -
Office Space                       954                 -               954                   16                   938

                        ---------------    --------------    --------------     ----------------    ------------------
Total                        $   2,466          $  2,150         $   4,616            $   2,750              $  1,866
                        ===============    ==============    ==============     ================    ==================`

Workforce reductions included 130 personnel to whom the Company paid a severance benefit. The elimination of the
office space results in a reduction of approximately 44,298 square feet, or 41% of the office space occupied by the
Company at December 31, 2000. The Company's applicable leases will be terminated or sublet to other tenants. As a
result of the involuntary terminations, executive pay cuts, write-down of excess equipment and the elimination of
office space, the Company anticipates saving approximately $963,000 in personnel costs, $284,000 in depreciation and
$220,000 in occupancy expense per quarter, starting in the second quarter of 2001.

The Company intends to continue to aggressively manage costs to maintain better alignment of expenses with near-term
revenue opportunities.



##### Concero, Inc.
                                 Notes to Condensed Consolidated Financial Statements
                                                   March 31, 2001
                                                     (Unaudited)

##### 6.     Stock Option Cancellation/New Grant Program

During the first quarter of 2001, Concero established a program whereby each employee with outstanding stock options
was given the opportunity  to cancel some, or all of their option grants in exchange for a promise by the Company to
grant a new stock option in six months and two days from date of their election to cancel options.  The new grant will
be for the same number of shares cancelled and will have an exercise price equal to the market closing price on the
date of the new grant.  New grants will vest 75% in equal installments over the three years following the grant with
the remaining 25% vesting at three and a half years.  The program ended on April 30, 2001, and 232,600 shares were
cancelled pursuant to the program.

##### Item 2.

#### MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to the historical information contained herein, the discussion  in this Form 10-Q contains
forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, that involve risks and uncertainties, such as statements for the plans, objectives,
expectations and intentions of Concero. Such forward looking statements are generally accompanied by words such as
"plan," "estimate," "expect," "believe," "could,"  "would," "anticipate," "may," or other words that convey
uncertainty of future events or outcomes. These forward-looking statements and other statements made elsewhere in
this report are made in reliance on the Private Securities Litigation Reform Act of 1995. The cautionary statements
made in this Form 10-Q should be read as being applicable  to all related  forward-looking statements whenever they
appear in this Form 10-Q.  Our actual results could differ materially from the results discussed in the
forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited
to, those discussed under the section below entitled "Factors That May Affect Future Results, Financial Condition and
Market Price of Securities" as well as those cautionary statements and other factors set forth elsewhere herein.

### Overview

We are an e-business services firm that offers strategic consulting skills with deep technology and integration
expertise.  This combination enables us to utilize existing and new technologies to provide reliable, flexible and
scalable e-business solutions.  Our alliances with leading Internet and interactive television technology providers
allow us to gain a thorough understanding of their products and perspective on other products as well as
next-generation technologies.  Using our technology insight and skills, we assist our clients to define, design,
develop and deploy e-business solutions that enhance their competitive positions.

In 1999, our management team began executing a strategy of providing high value-added e-business services and
emphasizing relationships with leading technology providers aligned with our e-business focus.   Since the initiation
of that strategy, we have successfully transitioned to providing e-business services, which is now the primary source
of our revenue as evidenced by a 55% improvement in our average hourly bill rates since 1998 as compared with 2000.
As a result of that change in strategy, we also experienced significant revenue growth from 1998 through the second
quarter of 2000 after which time the market for e-business services began to deteriorate and our revenue declined.
We have initiated cost reduction measures including a significant reduction in our staffing levels to more closely
align our cost structure with anticipated future revenue opportunities.  We have also narrowed our focus service
offerings around:

- Strategy - We help clients create e-business strategies;
- Customer Portals - We enable clients to present a unified view of their company to their customers over the
Internet and through television and mobile devices,
- Content Chains - We enable clients to efficiently produce and manage compelling content comprised of rich
media, including video, audio, graphics and 3D models; and
- Interactive Television - We deliver interactive television and entertainment on demand solutions, extending
the reach of e-business to mass audiences.

We form strategic alliances with leading technology providers such as Vignette Corporation, Scientific-Atlanta and
Artesia Technologies.  We believe the nature of these alliances enables us to develop "ecosystems" centered around
leading technology providers in which we serve as a catalyst for the widespread adoption of the provider's products.
We call these ecosystems "exponential networks"or "exponets" for short.  Exponets allow us to enter new markets,
gain early access to emerging technologies, jointly market products and services and gain enhanced access to vendor
training and support.

Our clients include both Fortune 1000 and early stage companies whose business strategies are designed and built
around the Internet, including American Airlines, The Cobalt Group, Dell, Digital Think, Texas Utilities, TV Guide
and UBS Warburg.

In April 2000, we changed our name to Concero from PSW Technologies.  We engaged a national agency and a public
relations firm to launch our branding campaign and to assist with other on-going awareness activities.  We believe
that our name change and related advertising and promotional activities will enable us to communicate our
capabilities as a national e-business solutions provider to prospective clients and employees.

##### Results of Operations

The following table sets forth the percentage of revenue of certain items included in our condensed statement of
operations for the period indicated:

`Three Months
                                                      Ended March 31,

                                                 2000              2001
                                            ---------------    --------------
Revenue                                           100%              100%
Operating expenses:
   Technical staff                                 52                82
   Selling and administrative staff                18                32
   Other expenses                                  25                97
                                            ---------------    --------------
Total operating expense                            95               211
                                            ---------------    --------------
Income (loss) from operations                       5              (111)
Interest income                                     1                 3
Provision for income taxes                          2                 -
                                            ---------------    --------------
Net income (loss)                                   4%             (108)%
                                            ===============    ==============`

##### Three Months Ended March 31, 2001 Compared to the Three Months Ended March 31, 2000

##### Revenue

Our revenue consists primarily of fees for software services provided. Revenues decreased 40% to $8.5 million in the
quarter ended March 31, 2001 from $14.2 million in the quarter ended March 31, 2000.  The decline is principally due
to a softening in demand for e-business services due to a weak economy and reduced information technology spending
which was partially offset by an improvement in our average hourly bill rate. Comparing the first quarter of 2001
with the same period in 2000 our average hourly bill rate increased 20% to $133 from $111.

One client accounted for 15% of revenue in the first quarter of 2001. Another client accounted for 13% and 2% of
revenue for the first quarter of 2001 and the first quarter of 2000, respectively.  IBM, accounted for 5% and 13% of
revenue in the first quarter of 2001 and 2000, respectively. No other client accounted for more than 10% of revenue
for either period.

##### Technical Staff

Technical staff expenses consist of the cost of salaries, payroll taxes, health insurance and workers' compensation
for technical staff personnel assigned to client engagements and unassigned technical staff personnel, and fees paid
to  subcontractors for work performed in connection with a client engagement. Technical staff expenses decreased 6%
to $6.9 million in the quarter ended March 31, 2001 from $7.4 million in the quarter ended March 31, 2000. The
decrease in technical staff expenses is primarily due to the workforce reduction which occurred near the end of the
quarter to more closely align our cost structure with near-term revenue opportunities.

As a percentage of revenue, technical staff expenses increased to 82% in the quarter ended March 31, 2001 from 52% in
the same quarter last year. This increase was primarily the result of lower utilization of our technical staff.  Our
utilization rate was 46% for the first quarter of 2001, down from 75% in the first quarter of 2000.

##### Selling and Administrative Staff

Selling and administrative staff expenses consist of the cost of salaries, payroll taxes, health insurance and
workers' compensation for selling, marketing and administrative personnel as well as all commissions and bonuses paid
to technical and administrative staff.  Selling and administrative staff expenses increased 3% to $2.7 million in the
quarter ended March 31, 2001 from $2.6 million in the quarter ended March 31, 2000. As a percentage of revenues,
selling and administrative staff expenses increased to 32% in the quarter ended March 31, 2001 from 18% in the
quarter ended March 31, 2000 primarily as a result of lower revenues.

##### Other Expenses

Other expenses consist of all non-staff related costs, such as occupancy costs, travel, business insurance, business
development, recruiting, training and depreciation. Included in other expenses this quarter is a charge related to
cost reduction measures of $4.6 million which includes $1.5 million in severance costs, $950,000 for the elimination
of excess office space and $2.2 million for the write-down of excess capitalized equipment.  Other expenses increased
134% to $8.3 million in the quarter ended March 31, 2001 from $3.5 million in the first quarter of last year. As a
percentage of revenues, other expenses increased to 97% in the quarter ended March 31, 2001 from 25% for the quarter
ended March 31, 2000. These increases are primarily a result of the severance costs, the charge for the elimination
of excess office space and the write-down of equipment, as well as lower revenue.

Workforce reductions included 130 personnel to whom the Company paid a severance benefit. The elimination of the
office space results in a reduction of approximately 44,298 square feet, or 41% of the office space occupied by the
Company at December 31, 2000. The Company's affected leases will be terminated or sublet to other tenants. As a
result of the involuntary terminations, executive pay cuts, write-down of excess equipment and the elimination of
office space, the Company anticipates saving approximately $963,000 in personnel costs, $284,000 in depreciation and
$220,000 in occupancy expense per quarter, starting in the second quarter of 2001.

##### Income (Loss)  from Operations

A loss from operations of $9.4 million for the quarter ended March 31, 2001 was recorded which represents a decrease
from income from operations of $695,000 for the quarter ended March 31, 2000.  As a percentage of revenues, loss from
operations was 111% for the quarter ended March 31, 2001 compared to income from operations of 5% for the quarter
ended March 31, 2000. Again, included in the 2001 loss from operations is a charge of $4.6 million associated with
the cost reduction measures described above.

##### Income Taxes

No tax benefit was recorded in connection  with our loss this quarter.  Accordingly,  any future taxable  earnings will
benefit from a lower  effective  tax rate as a result of these  unrecognized  tax  carry-forwards.  The  provision  for
income taxes of $345,000 for the quarter ended March 31, 2000,  was computed  using an estimated  annual  effective tax
rate of 37%, which differs from the federal statutory rate of 34% as a result of state taxes,  tax-exempt  interest and
permanent differences for meals and entertainment expenses.

#### Liquidity and Capital Resources

We have historically financed our operations and met our capital expenditure requirements primarily through cash
flows from operations.  Our working capital consisted of $17.5 million as of March 31, 2001 down from $24.2 million
as of December 31, 2000.  Our operating activities used cash of $1.4 million for the first quarter of 2001.  Our
operating activities provided cash of $151,000 for the first quarter of 2000.  We purchased approximately $310,000
and $1.7 million of computers, office and system equipment and software in the first quarter of 2001 and 2000,
respectively.  At March 31, 2001, we had cash, cash equivalents and short-term investments totaling $12.5 million,
down from $14.2 million at December 31, 2000.

At March 31, 2001, we did not have any material commitments for capital expenditures. Our capital expenditures
normally consist primarily of purchases of laptop computers, computer servers and furniture, the amount of which
fluctuates based on the number of additional employees we hire and the number of new offices that we open in any
period.

The number of days of revenue in our accounts receivable balance fluctuated between 77 days to 83 days during the
first quarter of 2001 ending at 77 days at March 31, 2001, a decrease from 89 days at December 31, 2000.  We may
experience longer collection periods if the work we perform for smaller companies increases as a percentage of our
total services.

We anticipate that our existing cash, cash equivalents and short-term investment balances and potential cash flows
from operations will be adequate to fund our working capital and capital expenditure requirements for at least the
next 12 months. However, changes may occur that could consume available capital resources before such time. Our
capital requirements depend on numerous factors, including potential acquisitions, the timing of the receipt of
accounts receivable, employee growth and the percentage of projects performed at our facilities.

We currently do not maintain any committed credit facilities. We cannot assure you that commercial credit, if
necessary, will be available to us on favorable terms, or at all.

##### Factors That May Affect Future Results, Financial Condition and Market Price of Securities

##### Risks that Relate to Our Business Strategy

We are subject to a number of risks related to our business  strategy.  We describe  some of these risks below.  If any
of these risks  materializes,  our business,  financial  condition and results of operations  could be harmed,  and our
stock price could fall.

#### We refocused our business strategy.  This may not be successful.

In  August  1998 we began  building  a new  management  team.  The new  management  team  has  refocused  our  business
strategy.  This strategy is described in the section  captioned  "business" in our Annual Report on Form 10-K which was
filed on March 27, 2001.  Some of the changes to our business strategy include:

- expansion into new and largely untested business areas such as interactive television and broadband services;
- realignment of our internal corporate structure on a geographic basis as opposed to a product basis;
- a shift in focus of our client base from technology vendors to technology users; and
- a shift from longer-term development and maintenance arrangements to specific, shorter-term e-business
project engagements.

Our shift from ongoing development and maintenance engagements to strategic engagements has favorably affected our
average billing rates but negatively affected our technical staff utilization rates.  If we were not able to offset
decreases in our utilization rates through increases in our billing rates, our profitability would be harmed.
Adverse economic conditions, a lack of consumer acceptance of interactive television, broadband and other advanced
technologies, increased competition and other factors could hurt both our utilization rates and our billing rates. As
a result, it is too early to know whether the refocusing of our business strategy will help us achieve long-term
success.  Companies that implement major changes in their business strategy can face more challenging risks and
unexpected difficulties.  These risks and difficulties apply particularly to us because the market for our e-business
consulting services is new and rapidly evolving.

#### The success of our business strategy depends on our ability to identify emerging technologies that will gain wide
acceptance in future markets.

Our business strategy requires us to:

- identify promising technologies at an early stage in their development;
- accurately assess their long-term viability; and
- rapidly gain expertise in these technologies.

Our business may suffer if we invest time and resources in technologies that ultimately do not reach widespread use
or commercial success.  Even if we identify the best technologies, their widespread use and deployment may not occur
within a time span that is compatible with our business plans and revenue expectations.

In particular, some of the technologies that we are focusing on heavily, such as interactive television and
broadband, may not achieve business or consumer acceptance in the near term, or at all.  For example, companies
promoting interactive television and broadband services may find that consumers are reluctant to use these services
due to prohibitive cost or complexity.  As a result, we may commit substantial resources developing expertise in
areas that will not yield substantial revenue or profit for us in the next few years.

#### Our business strategy depends on our ability to create and maintain strategic alliances with other e-business and
technology companies.  These alliances may shift or terminate suddenly.

We currently maintain strategic alliances with other companies that help us to gain access to new technology and
business opportunities.  This is one of the principles of our exponet strategy.  Like many in our industry, we
sometimes refer to these companies as our 'partners", but they are not partners in a legal sense.  In particular,
these companies are under no binding obligation to remain in relationships with us or to continue to cooperate with
us, and these relationships are generally not exclusive.

Any of our alliance partners may choose to end the alliance, alter the terms of the alliance in a way that harms our
business or increase the level of business they conduct with one of our competitors.  Similarly, if one of our
alliance partners undergoes a management or ownership change, we could lose access to critical technology and
business opportunities.  The publicity that could accompany these kinds of changes could have a damaging effect on
our stock price.

Moreover, our brand may be closely associated with the business success or failure of our alliance partners, many of
whom are pursuing unproven business models in competitive markets.  As a result, the failure or difficulties of these
companies may damage our brand and hurt our business opportunities.

#### Some of our clients are emerging companies that have little or no operating history and may lack the resources to pay
our fees.

Because we focus on emerging technologies, we derive some of our revenue from small companies, particularly start-up
companies, that have limited operating histories and resources to pay our fees.  These companies often have little or
no earnings or cash flow and their business is generally at a greater risk of failing than more established
businesses.  As a result, these clients may not be able to pay for our services in a timely manner, or at all.  These
effects would lead to an extension of our collection period, which would harm our liquidity, and an increase in our
bad debt expense, which would harm our profitability.

#### We may make investments in clients or potential clients that are emerging companies.  These investments are risky, we
have limited experience in making these investments and we could lose all of our investment.

Although not a key part of our strategy, we may make strategic investments in small, emerging clients or potential
clients.  We may also agree to take some or all of our fees in the form of equity securities issued by these clients
as part of our engagement.  Investments in such emerging companies are extremely risky and some or all of our
investment could be lost.  We have limited experience in these investments and in managing these arrangements.

#### Potential acquisitions could be difficult to integrate, disrupt our business, dilute stockholder value and hurt our
operating results.

We may pursue acquisitions of businesses and technologies that are complementary to our core businesses.  Our ability
to grow through acquisitions will depend on the availability of attractive acquisition candidates, our ability to
compete for these acquisition candidates and the availability of capital to finance these acquisitions.

The benefits of an acquisition often may take considerable time to develop, and the acquisition may never produce the
intended benefits.  Factors that could cause an acquisition to be unsuccessful include:

- the loss of employees or clients of the acquired business, and thus a loss of one of the key rationales for
     making the acquisition;
- our failure to appreciate the dynamics of markets in which we have limited or no prior experience;
- the diversion of management's attention from our core businesses;
- any difficulties we experience in assimilating the operations of an acquired business or in realizing
     projected efficiencies, cost savings and revenue synergies;
- our failure to assess or discover liabilities;
- the dilution of our stockholders' equity and earnings per share, particularly if we finance the acquisitions
with equity; and
- an increase in our debt and contingent liabilities, which in turn could restrict our ability to access
additional capital when needed or to pursue other important elements of our business plan.

#### If we fail to manage our growth, our resources may be strained and our ability to implement our business strategy
will be harmed.

Our growth could place significant demands on our management and other resources.  In order to manage our growth
effectively, we must continue to develop and improve our operational, financial and other internal systems, as well
as our business development capabilities, and we must continue to attract, train, retain, motivate and manage our
employees.  We may not succeed in these efforts.

#### Risks that Relate to Our Business

We are subject to a number of risks that are particular to our business and that may or may not affect our
competitors.  We describe some of these below.  If any of these risks materializes, our business, financial condition
and results of operations could be harmed, and our stock price could fall.

#### Our business is subject to declines in demand due to changing market dynamics affecting our customers.

Our business is subject to declines in demand due to changing market dynamics affecting our customers.  In the first
quarter of 2001, we experienced a 40% decrease in revenue as compared to the first quarter of 2000.  We believe this
decrease was attributable to reduced or deferred spending for e-business services by established companies resulting
from efforts of these companies to reduce expenses in light of the recent deterioration of economic conditions in the
United States.  A continuation of these factors would continue to adversely affect our revenue and profitability.

#### Our key employees are critical to our continued success. The loss of any of these employees could impair our ability
to execute our strategy or grow our business.

Our future success will depend in part upon the continued services of a number of key management and technical
employees.  The loss of any of our key personnel could hurt our ability to execute our strategy and grow our
business.  We do not maintain key-person life insurance on any of our employees.  In addition, if one or more of our
key employees resigns to join a competitor or to form a competing business, we could lose existing or potential
clients.

In March 2001, we announced plans to reduce our workforce by approximately 130 people, including approximately 85
technical staff who perform consulting services, in order to more closely match our workforce level to our recent
levels of demand for our services.  We believe that the retained workforce will allow us to continue to execute our
strategy at our anticipated lower levels of activity although it is possible that our workforce reduction plans will
result in the loss of key personnel who we desire to retain.

#### We need to recruit, train and retain qualified employees to successfully grow our business.

Our success depends on our ability to recruit, train, retain, motivate and manage highly skilled employees.
Qualified project managers, software architects and senior technical and professional staff with the skills we need
are in demand worldwide. If we are not able to hire, train and retain a sufficient number of highly skilled
employees, our ability to manage and staff existing projects and to obtain new projects might suffer.  In addition, a
competitive labor market may require us to raise salaries faster than we have in the past, and faster than we raise
our billing rates.

##### We changed our name.

We changed our name to Concero, Inc.  Although we have filed a trademark application for this name, we may be unable
to protect our name or prevent others from using our name.  Other parties may claim that our use of Concero violates
their intellectual property rights.  If we are prevented from using the Concero name, it may become more difficult
for us to carry out our business plans.  In addition, our planned advertisement of the change and promotion of our
new brand may fail to reach important segments of our potential customer base, and our marketing campaign may yield
little results.

#### We may not be able to protect our intellectual property and proprietary rights.

Our proprietary intellectual property consists of the business processes and software that we develop to assist
clients.  Our efforts to protect our proprietary rights may not be adequate to deter theft or misuse of our
intellectual property.  We may not be able to detect unauthorized use of our intellectual property and take
appropriate steps to enforce our rights.  If third parties infringe, misappropriate or copy our trade secrets,
proprietary processes, copyrights, trademarks or other proprietary information, we could lose important competitive
advantages.

#### We could be subject to claims that we infringe the intellectual property rights of others.

There has been a marked increase in patent and intellectual property litigation in recent months, particularly
involving competitors in the technology sector. Although we are not aware that any of our activities infringe the
patent or other intellectual property rights of others, we have not sought any formal assurances that this is the
case.  Other parties may assert infringement claims against us or claim that we have violated their intellectual
property rights.  These claims, even if not true, could result in significant legal and other costs and may distract
our management.  If we are required to stop using a particular methodology or technology because of an infringement
lawsuit, it could become extremely difficult to carry out our business plans.

#### We depend on a small number of clients for a significant portion of our revenue.

In the first quarters of 2000 and 2001, we derived 41% and 51% of our revenue from our five largest clients,
respectively.  Our largest client in the first quarter of 2000 and 2001 accounted for 13% and 15% of our revenue,
respectively.  The volume of work performed for specific clients is likely to vary from year to year, and a major
client in one year may not use our services in another year.  The loss or reduction of our revenue due to a decline
in services performed for any large client could harm our business.

#### Our lack of long-term contracts with clients makes our revenue difficult to predict.

Our clients retain us on an engagement-by-engagement basis, rather than under long-term contracts.  As a result, the
size and number of client engagements are difficult to predict, and vary markedly from quarter to quarter.  At the
same time, our operating expenses are relatively fixed and cannot be reduced on short notice for unanticipated
shortfalls in our revenue.  This is because our most significant operating expense is employee salaries.

Moreover, our clients can generally reduce the scope of our services or cancel our engagements without penalty and
with little or no notice.  If a client postpones, modifies or cancels an engagement or chooses not to retain us for
additional phases of a project, we might not be able to re-deploy our employees quickly to other engagements.

#### Some of our client contracts are on a fixed-price basis.  If we fail to accurately estimate the resources required
for a fixed-price project, our profitability would be harmed.

During the first quarter of 2000 and 2001, we generated approximately 12% and 3%, respectively, of our revenue on a
fixed-price, fixed-delivery-schedule basis, rather than on a time-and-materials basis.  If we fail to accurately
estimate the resources required for a fixed-price project or fail to complete our obligations on time, our revenue
could be harmed and our expenses could increase.

#### We may not collect all of our accounts receivable.

The accounts receivable we generate from our services are subject to the risk of non-payment, either due to the lack
of financial resources of a customer or due to a dispute with respect to the services provided.  In 2000 and 2001, we
increased our reserve for doubtful accounts by $1.7 million and $300,000 in order to take into account the likelihood
of non-payment on a portion of our accounts receivable.  We periodically analyze our accounts receivable and these
reviews may result in increases to our reserve for doubtful accounts.

##### Risks that Relate to Our Industry

We are subject to a number of risks that are inherent in the technology industry.  We describe some of these below.
If any of these risks materializes, our business, financial condition and results of operations could be harmed, and
our stock price could fall.

#### Our industry is intensely competitive.

We expect competition to persist and intensify in the future.  We cannot be certain that we will be able to compete
successfully with existing or new competitors.  If we fail to compete successfully, our business would be seriously
harmed.  Competition can make it more difficult for us to:

- attract and retain customers;
- expand our sales and marketing activities;
- create and maintain the strategic relationships that are vital to success in the Internet and e-business
     marketplace, and thus develop and acquire knowledge of leading-edge technologies; and
- recruit and maintain the highly skilled technical staff that our business model demands.

We compete against numerous companies that offer Internet services, software engineering, systems integration, or
management consulting, as well as the consulting arms of large accounting firms.  Because relatively low barriers to
entry characterize the market, we expect other companies to enter our market.  Some large information technology
consulting firms have announced that they will focus more resources on e-business opportunities.

Many of our current competitors have longer operating histories, larger client bases, larger professional staffs,
greater brand recognition and greater financial, technical, marketing and other resources than we do.  This may place
us at a disadvantage in responding to our competitors' pricing strategies, technological advances, advertising
campaigns, strategic partnerships and other initiatives.  In addition, many of our competitors have well established
relationships with our current and potential clients and have extensive knowledge of our industry.  As a result, our
competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements,
and they may also be able to devote more resources to the development, promotion and sale of their services than we
can.  Competitors that offer more standardized or less customized services than we do may have a substantial cost
advantage, which could force us to lower our prices, adversely affecting our operating margins.

Current and potential competitors also have established or may establish cooperative relationships among themselves
or with third parties to increase their ability to address customer needs.  Accordingly, it is possible that new
competitors or alliances among competitors may emerge and rapidly acquire significant market share.  In addition,
some of our competitors may develop services that are superior to, or have greater market acceptance than, the
services that we offer.

#### Our success depends on the continued growth and acceptance of advanced technologies.

Our future success depends heavily on the further widespread use of the Internet as a means for commerce, and
consumer and commercial acceptance of interactive television and broadband.  Despite the large amount of investor and
media attention these technologies have received, they are in early stages of development and it is difficult to
predict whether or how they will continue to develop.  Development of these technologies could be hindered by a
number of factors, such as government regulation, taxation, general economic conditions and lack of consumer
acceptance.  If these new technologies fail to gain widespread acceptance or grow more slowly than expected, our
business opportunities will diminish.

##### Risks that Relate to Our Stock

Our stock price is subject to a number of risks.  We describe some of these below.  If any of these risks
materializes, our stock price could fall.

#### Our quarterly operating results will vary, which may affect the market price of our common stock in a manner
unrelated to our long-term performance.

Our quarterly operating results have varied in the past and we expect that they will continue to vary in the future
depending on a number of factors, many of which are outside of our control.  Factors that may cause our quarterly
operating results to vary include:

- the number, size and scope of projects in which we are engaged;
- the contractual terms and degree of completion of these projects;
- any delays incurred in connection with a project;
- our success in earning bonuses or other contingent payments;
- our employee hiring and utilization rates;
- the adequacy of provisions for losses;
- the accuracy of our estimates of resources required to complete ongoing projects;
- customer budget cycles and spending priorities; and
- general economic conditions.

A high percentage of our operating expenses, particularly personnel and rent, are fixed in advance of any particular
quarter.  As a result, unanticipated variations in the number of our projects, in our progress on projects or in our
employee utilization rates may cause significant variations in operating results in any particular quarter.  Given
the possibility of these quarterly fluctuations, we believe that comparisons of our quarterly results are not
necessarily meaningful and that results for one quarter should not be relied upon to predict our future performance.

Any quarterly shortfall in revenue or earnings from expected levels, or other short-term failures to meet the
expectations of securities analysts or the market in general, can have an immediate and damaging effect on the market
price of our common stock.

#### Our common stock may experience extreme price and volume fluctuations.

The stock market, from time to time, has experienced extreme price and volume fluctuations.  The market prices of the
securities of Internet and technology companies have been especially volatile, including fluctuations that often are
unrelated to the operating performance of the affected companies.  Broad market fluctuations of this type may
adversely affect the market price of our common stock.

The market price of our common stock has fluctuated since we became a public company.  Our stock price could continue
to fluctuate significantly due to a variety of factors, including:

- public announcements concerning us, our competitors or the technology industry;
- fluctuations in our operating results;
- introductions of new products or services by us or our competitors;
- changes in analysts' revenue or earnings estimates; and
- announcements of technological innovations.

In the past, companies that have experienced volatility in the market price of their stock have been the target of
securities class action litigation.  If we were sued in a securities class action, we could incur substantial costs
and suffer from a diversion of our management's attention and resources.

##### Item 3.

##### Quantitative and Qualitative Disclosures about Market Risks

We do not use derivative financial instruments in our non-trading investment portfolio. We place our investments in
instruments that meet high credit quality standards, as specified by our investment policy and which mature within
one year from the date purchased.

We are exposed to cash flow and fair value risk from changes in interest rates, which may affect our financial
position, results of operations and cash flows.  In seeking to minimize the risks from interest rate fluctuations, we
manage exposures through ongoing evaluation of our investment portfolio.  We do not use financial instruments for
trading or other speculative purposes.

The table below provides information about our non-trading investment portfolio.  For investment securities, the
table presents principal cash flows and related weighted average fixed interest rates by expected maturity dates.

`Investments
                                                        Maturing           Weighted           Fair Value
                                                         Before             Average               At
              At March 31, 2001                         March 31,          Interest           March 31,
    (in thousands, except interest rates)                 2002               Rate                2001
----------------------------------------------    ------------------    ------------    -------------------

Money market funds                                      $        71           5.41%           $         71
Corporate issues                                              7,902           5.00%                  7,902
                                                  ------------------    ------------    -------------------
                                                        $     7,973           5.01%           $      7,973
                                                  ==================    ============    ===================


                                                    Investments
                                                        Maturing           Weighted           Fair Value
                                                         Before             Average               At
            At December 31, 2000                       December 31,         Interest          December 31,
    (in thousands, except interest rates)                 2001               Rate                2000
----------------------------------------------    ------------------    ------------    -------------------

Money market funds                                      $     3,476           6.38%           $      3,476
Corporate issues                                              9,122           5.89%                  9,122
                                                  ------------------    ------------    -------------------
                                                        $    12,598           6.03%           $     12,598
                                                  ==================    ============    ===================`

##### PART II - OTHER INFORMATION

##### Item 6.   Exhibits and Reports on Form 8-K

Number        Description

None.

None.

##### SIGNATURES

Pursuant to the  requirements of the Securities  Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized on May 11, 2001.

#### CONCERO, INC.

Pursuant  to the  requirements  of the  Securities  Exchange  Act of 1934,  this  report has been  signed  below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated:

`Signature                                   Title                                       Date

/s/    TIMOTHY D. WEBB                                        President, Chief Executive                  May 11, 2001
       Timothy D. Webb                                          Officer and Director
                                                                (principal executive officer)

/s/    KEITH D. THATCHER                                      Chief Financial Officer, Vice               May 11, 2001
       Keith D. Thatcher                                        President of Finance and Treasurer
                                                                (principal financial officer)

/s/   COLLEEN M. SERRATA                                      Controller                                  May 11, 2001
      Colleen M. Serrata                                        (principal accounting officer)`